USD Trading Outlook
AUD/USD AUD continued to benefit from upbeat data in European trade. AUD/USD added to gains from Asia and sat just above 0.9320 into NY's open. The USD was generally weak in early NY and the pair pushed further. A high of 0.9352 was hit before the pair slipped back near 0.9340 late in the day. JPY strength persisted in NY's afternoon to push AUD/JPY from 98.14 towards 97.90 and aided AUD/USD's slide from the high. Traders now turn their focus to Oz retail sales and trade data. Should sale beat forecasts the mkt might being to rethink the RBA's neutral rate stance especially after Stevens' tip to the dangers of housing prices. Solid results from sales & trade might propel AUD/USD above the 55-DMA and key s-t res near 0.9375/80. IF that occurs the July high is back in play. Soft data results likely see the pair linger in its recent 0.9235/0.9375 range.
AUD/USD Aussie couldn't recover from overnight losses during the NY session. Europe had added to Asia's losses and had AUD/USD sit just below 0.9290 into NY's open. An early NY dip below 0.9280 met buyers and the pair rebounded near 0.9290. Aiding the lift towards 0.9290 was a lift in AUD/NZD after the weak Fonterra milk auction. The bounce was short lived though as US ISM data was well above f/c and commodity currencies were heavy across the board. The floor fell out from under AUD/USD and it quickly hit a 0.9268 low. Only a slight bounce was seen though as the USD and US yields maintained most of the day's gains. The pair sat near 0.9275 late in the session. Traders now look to Oz Q2 GDP and RBA's Stevens' speech to CEDA. GDP is expected to deteriorate from its prior result and Stevens is likely to jawbone AUD lower if he mentions it. These factors should weigh on the pair and we may see key s-t support near 0.9240 tested. If that is cleared bigger support in the 0.9175/0.9200 (200-DMA, May low) is the next hurdle for bears.
AUD/USD ran into resistance ahead of 0.9355 in early European trade after extending north from 0.9318 (Asia low). Light stops are tipped above 0.9355 (0.9356 = Fri NY session high), with offers mooted pre-0.9400. The RBA is expected to leave its cash rate at 2.5% at 0.30am ET Tues.
AUD/USD A tight range held for most of Europe. They did try a run above 0.9360 but failed to gain much ground as solid offering interest was noted above the recent high and into 0.9400. A slide took the pair to the day's 0.9332 low just ahead of NY's open. Early NY saw limited action with the pair lingering near the low. A quick blip up near 0.9355 took hold on month-end USD sales but the rally was short lived. The USD staged a nice rally in the afternoon as EUR/USD made a new low for 2014. AUD/USD turned heavy and sat just above the day's low late in the session. Action for AUD may increase significantly as there is major event and data risk due. The RBA meets and it's likely Stevens will mention AUD's strength again. He may have to bolster his rhetoric though as the market is mostly ignoring recent rhetoric. On the data front Q2 GDP and July retail sales and trade data are due. Should the stars align in favor of bears a retest of 0.9230/40 support is likely. If that is cleared bears will try their luck at key 0.9175/0.9200 support where the 200-DMA and May low sit.
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